Google's Bias to Free Expression - Analyst Blog

Amid considerable speculation regarding the stealing of its user authentication software codes, which culminated in the withdrawal of Google.cn, Google Inc. (GOOG) reiterated its allegiance to free expression in an Official Google blog.

The company stated that in deciding against censorship in China, it was acting in accordance with law and the true spirit of the law as stated in Article 19 of the Universal Declaration of Human Rights, which reads as follows-

“Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers”.

The company stated that not only China, but 40 other countries had laws that required censorship in some form or other. Google stated that since it had to deal with the issue on a regular basis, the company had its own method of compliance.

Google typically complies with a country’s laws with respect to the services it provides within that country. It however tries to keep search results as uncensored as possible, in order to correctly represent the information available on the Internet.

Additionally, other Google platforms that host content, such as Blogger, YouTube and Picasa Web Albums are governed by their own content policies.

The company’s advertisement products are intended for commercial purposes and not related to free expression. Hence, Google has stringent policies that govern them.

While Google’s decision to go against the Chinese government has disappointed investors, there could be other things to consider. Google is not another tech company with a lot of tangible products to offer. Therefore, the company’s fortunes are necessarily dependent on the quality and availability of content. If Google had taken a softer stand with respect to China, the company may not have won in the end.

A number of sources have reported the increasing difficulties of foreign companies operating in China. The Chinese government, which is the primary procurement agency, has been making laws that increasingly restrict foreign goods and intellectual property.

Although Google will not benefit from the growth in the region, it is quite possible that had it stayed, the company would have been blocked out in other ways. China will no doubt promote local company Baidu.com (BIDU), which had been losing market share to Google since the company launched Google.cn.

We have a Neutral rating on Google shares.